Strengthening public financial management systems and processes in Myanmar
Henlo van Nieuwenhuyzen, Nick Travis, Stephanie Allan United Nations Children's Fund (UNICEF)
The Ministry of Social Welfare Relief and Resettlement (MSWRR) has historically accounted for approximately 0.1 per cent of total government expenditure in Myanmar. The objective of the assignment is to strengthen public financial management (PFM) systems and processes within MSWRR. More specifically, the project is supporting the Ministry to improve its capability to budget appropriately and to spend more efficiently and effectively, in order for it to deliver more equitable social assistance services for the most vulnerable people of Myanmar. The ultimate objective is to help the Ministry to justify higher budget allocations from the Ministry of Finance so that it is better able to deliver on its mandate to deliver services to the most vulnerable groups in Myanmar.
While the onset of political, economic and social reforms in Myanmar since 2011 has resulted in increased public investment in the health and education sectors, the social welfare budget has remained persistently low. This has significantly limited the ability of the Ministry to deliver its mandate on social welfare, the protection of vulnerable groups and disaster preparedness.
This is partly due to the perceived lack of capacity within the MSWRR to manage additional funding effectively, partly caused by a weak linkage between the Ministry’s key planning documents and what is presented in the annual budget submission. This is due to a variety of reasons, such as the lack of a robust strategic prioritisation process, the use of incremental budgeting, the presentation of separate recurrent and capital budgets, and an emphasis on costing inputs as opposed to orientating the budget around specific objectives and results. These practices have typically resulted in a budget that is hard to interpret and justify, making it hard for the Ministry to make a solid case for higher budget allocations that would enable it to better address key service delivery gaps.
We are working collaboratively with UNICEF to help address this issue through the provision of technical assistance (TA) to the Ministry, offering capacity-building support and addressing some of the observed weaknesses in public financial management (PFM) that were hampering service delivery.
During phase I, the TA team conducted a review of current planning and budgeting practices within the MSWRR and analysed all available data on its expenditure, in order to obtain an understanding of the core functions of the Ministry and the types of services that it delivers. The review also highlighted in greater detail the main areas of weakness with regards to budget preparation.
Following this situation analysis, the TA team designed a package to address some of the observed weaknesses. Our support was given in three stages, which were:
- facilitating a strategic prioritisation process to help the Ministry determine which activities from its strategic plans should be costed and included in the 2017/18 budget submission;
- delivering basic training on the principles and practice of costing and budget preparation at the line ministry level; and
- supporting the Ministry in mapping its costed programmes into the budget submission. At the same time, the TA team assisted the MSWRR in its communication with the Ministry of Finance, to ensure that its priorities and ambitions were more effectively communicated and justified.
In order to strengthen the quality of the budget submission the TA team introduced a simple but important reform, known as the Narrative Template. This document was designed to complement – rather than replace – the existing templates used for budget preparation by line ministries and its purpose was to strengthen the case for a higher budget allocation by allowing the Ministry to justify the proposed additional expenditures, through a clear presentation of costed priority programmes based upon a rigorous prioritisation process that shows the proposed expenditures are affordable, realistic, deliver substantial benefits and target the groups most in need.
We are now starting phase II of the project, which will build upon the progress of the previous phase, attempting to build capacity for strategic and operational planning as an important precursor to better budgeting outcomes.
The narrative justification budget preparation reform has already demonstrated its value by being actively used during budget preparation and then in the budget hearing process to defend Department of Social Welfare programme expenditure allocations. By strengthening internal PFM processes and strategically engaging with the Ministry of Planning and Finance, the project helped the MSWRR to secure an almost three-fold increase in its budget allocation, which may not have been possible otherwise. The project has helped to ensure that the increase in funds have been allocated to important social programmes (e.g. cash transfers, case management, reintegration support, victim support, mother circles etc.) that will have significant positive impact on the most vulnerable groups in Myanmar.